11 March 2005
Conservative efficiency plans are robust and the full financial burdens of scrapping 168 quangos and laying off 235,000 staff have been built into the party's £35bn savings target, according to George Osborne.
In an interview with Public Finance the shadow chief secretary to the Treasury said the David James review of government spending had rigorously calculated all the transitional costs that would be incurred to achieve the savings.
James's report, published in January, claimed that scrapping dozens of government bodies and agencies would save £4.3bn. Osborne told PF that this figure was the extra money that would be in the Treasury's coffers after transitional costs had been covered.
Speaking before the Conservative Party's Spring Forum in Brighton on March 11–12, Osborne said James, a renowned business trouble-shooter hand-picked by Tory leader Michael Howard, had been cautious and realistic in his financial estimates.
Osborne insisted that in cases where a quango's functions are deemed necessary, such as some performed by strategic health authorities, the Tories have decided which other organisations will assume responsibility for them and have budgeted for the continuing running costs.
Critics of the Conservatives' plan have accused the party of failing to recognise such financial pressures and of underestimating the redundancy payoffs necessary, claims that Osborne rejects.
'We've been pretty conservative in the estimates we've made. Built in to the whole James process is a clear understanding of the transitional costs and we've set aside a very substantial amount of money to cover these costs, such as voluntary redundancies,' he said.
The James recommendations will feature prominently at this weekend's forum, as the Tories finalise their key policy messages for the imminent general election campaign.
Osborne took pains to stress that the James agenda was not an attack on public sector workers but a drive to rein in wasteful government spending.
'People who work in the public services do an extremely important and valuable job,' he told PF. 'When I speak to frontline professionals, such as teachers and hospital staff, they are the most frustrated by the target culture and bureaucratic culture that has sprung up. They just want to get on and do the job that they came into the public services to do.'
Osborne added that he hoped public sector workers would welcome the party's reform programme, which would 'deliver £34bn extra for health and £15bn extra for education over the next Parliament'.
PFmar2005
